The men who run global
corporations are the first in history with the
organisation, technology, money, and ideology to make
a credible try at managing the world as an integrated
economic unit.

Richard J. Barnett and Ronald E.
Mueller, Global Reach

In the
twenty-odd years since these words were penned,
transnational corporations (TNCs) have consolidated their
power and control over the world. Today, 47 of the top
100 economies are actually transnational corporations, 70
percent of global trade is controlled by a just 500
corporations, and a mere one per cent of the TNCs on this
planet own half the total stock of foreign direct
investment. At the same time, the new free market and
free trade regimes (eg. GATT, NAFTA) have created global
conditions in which transnational corporations and banks
can move their capital, technology, goods, services -
freely throughout the world unfettered by the regulations
of nation states or democratically elected governments.

In
effect, what has taken place is a massive shift in power,
out of the hands of nation states and democratic
governments and into the hands of transnational
corporations and banks. It is now the TNCs that
effectively rule and govern the lives of the vast
majority of the people on earth. Yet, these new world
realities are seldom reflected in the strategies of
citizen movements for democratic social change. All too
often, strategies are primarily aimed at changing
government policies while the real power being exercised
by the TNCs behind the scenes is rarely challenged, let
alone dismantled. And when the operations of TNCs become
the prime target for citizen action campaigns, there is a
tendency to employ a more or less piecemeal approach to
what is a deeply systemic problem.

As we
approach the 21st century, it is imperative that social
movements in both the North and the South develop a new
politics for challenging the dominant global rule of
transnational enterprises.

The
following are some of the salient ingredients of the new
powers that now give corporations effective control over
the lives of peoples and nations in this age of
globalisation, and then some suggestions as to changing
the situation.

Over the
past three decades, as David Korten points out, the
world's leading business and governmental elites have
been gathering on a regular basis in elite fora such as
the Council on Foreign Relations, Bilderberg, and
especially the Trilateral Commission to develop a
consensus on an agenda for globalisation.

Behind
closed doors, these leaders have been able to agree on
certain common approaches that include: global economic
integration, the harmonisation of various trade, tax and
regulatory measures, and an economic philosophy that
should guide all nations, combined with political
strategies to achieve such changes. With passage of the
new free trade agreements to augment the Bretton Woods
agreement, and establishment of the World Trade
Organisation, this unelected and unaccountable global
elite has effectively seized important instruments of
governance in the three dominant regions of the world.

Regardless
of their nominal home bases, Japanese, American, and
European corporate giants have increasingly become stateless,
juggling multiple national identities and loyalties to
achieve their global competitive interests. No matter
where they are operating in the world, these
transnational conglomerates can use their overseas
subsidiaries, joint ventures, licensing agreements, and
strategic alliances to assume foreign identities whenever
it suits their purposes. In so doing, they develop
chameleon-like abilities to change their identities to
resemble insiders wherever they are operating. As one CEO
put it: "When we go to Brussels, we're member states
of the EEC and when we go to Washington we're an American
company too." Whenever they need to, they will wrap
themselves up in the national flag of their home
governments to get support for tax breaks, research
subsidies, or governmental representation in negotiations
affecting their marketing plans. Through this process,
stateless corporations are effectively transforming
nation states to suit their interests.

CORPORATE
STATE ALLIANCE

In most
of the industrialised countries, business councils
composed of the CEOs of the largest corporations and
banks, have formed new corporate state alliances. In the
U.S., for example, the Business Round Table's 200 members
include the heads of 42 of the 50 largest Fortune 500
corporations, 7 of the 8 largest U.S. commercial banks, 7
of the 10 largest insurance companies, 5 of the 7 largest
retail chains, 7 of the 8 largest transportation
companies, and 9 of the 11 largest utility companies. In
countries like Canada, the Business Council on National
Issues has organised itself into a shadow cabinet of the
federal government with CEOs heading up task forces on
major public policy issues. Once policy consensus is
reached amongst the principal TNCs, massive lobbying and
advertising campaigns are mounted around key policy
issues. Armed with a network of policy research
institutes and public relations firms, these business
coalitions are able to mobilise facts, policy positions,
expert analysis, and opinion polls as well as organise
citizen front groups for their campaigns to change
national governments and their policies. By campaigning
for debt elimination, privatisation, and deregulation,
business coalitions have effectively dismantled many of
the powers and tools of national governments.

The
fundamental purposes of the new free trade deals (eg.
GATT, NAFTA) are to provide protection among national
constitutions for the freedoms of transnational
corporations and banks to act unhindered by national
laws. As Carla Hills, chief U.S. negotiator for both
NAFTA and the GATT, put it: "We want corporations to
be able to make investment overseas without being
required to take a local partner, to export a given
percentage of their output, to use local parts, or to
meet a dozen other restrictions." As a result, the
"national treatment" clauses in NAFTA and GATT
guarantee that foreign investors have the same rights and
freedoms as domestic firms. The investment codes in the
new free trade regimes ensure that various regulations of
nation states are removed, including foreign investment
requirements, export quotas, local procurement, job
content, and technology specifications. Through this kind
of consitiutional protection, the rights of TNCs take
precedence over the rights of citizens in their
respective nation states. In addition, the legislative
authority of the GATT and the NAFTA supercedes the
legislation of participating nation states when matters
of conflict arise.

The
creation of a globalised consumer culture is another key
element of the new corporate tyranny. The transnationals
want to be able to sell their products with the same
basic advertising design in Bangkok and Santiago as in
Paris, Tokyo, New York or London. The prime example is
the way Coca-Cola has become a global symbol transcending
all national and cultural boundaries. Through television
images and satellite communications, a homogenous set of
perspectives, tastes, and desires can be transmitted to
all corners of the globe. It is now estimated that
transnationals spend well over half as much money in
advertising to create corporate friendly consumers as the
nations of the world spend on public education. In turn,
all this corporate advertising tends to forge a
connection in people's mindsets between private interests
(ie. of the TNCs) and the public interest. As a result, a
global monoculture is emerging which not only
disregards local tastes and cultural differences, but
threatens to serve as a form of social control over the
attitudes, expectations, and behaviour of people all over
the world.

The two
main Bretton Woods institutions, the World Bank and the
International Monetary Fund, have become principal tools
by which the new global managers maintain corporate
control over nations and peoples, especially in countries
of the South. Both the Bank and the Fund are directly
linked to the transnational financial sector in terms of
the borrowing and the lending ends of their operations.
Loan agreements are routinely negotiated in secret
between banking and government officials who, for the
most part, are not accountable to the people on whose
behalf they are obligating the national treasury to
foreign lenders. The Bank and the Fund must be regarded,
as one observer puts it, "as governance
institutions, exercising power through [their] financial
leverage to legislate entire legal regimens and even to
alter the constitutional structure of borrowing
nations." Their own consultants often have the power
to "rewrite a country's trade policy, fiscal
policies, civil service requirements, labour laws, health
care arrangements, environmental regulations, energy
policy, resettlement requirements, procurement rules and
budgetary policy."

In the
1980s, the World Bank and the IMF used debt
renegotiations as a club to force the developing nations
into making widespread structural adjustments (SAPs) in
their economies. Each SAP package called for sweeping
changes in economic and social policies design to channel
the country's resources and productivity into debt
repayments and enhanced transnational competition. The
SAP measures included large scale deregulation,
privatisation, currency devaluation, social spending
cuts, lower corporate taxes, expanding exports of natural
resources and agricultural products, and removal of
foreign investment restrictions. In order to obtain the
foreign exchange to pay down their debt loads, developing
countries were compelled to become export oriented
economies, selling off their natural resources and
agricultural commodities on global markets while rapidly
increasing their dependency on imported goods and
services. In effect, the SAPs have become instruments for
the recolonisation of many developing countries in the
South in the interests of transnational corporations and
banks.

The new
World Trade Organisation established by the Uruguay Round
of the GATT is designed, in effect, to serve as a global
governing body for transnational corporate interests. The
WTO will have legislative as well as judicial powers. It
has a mandate to eliminate all barriers to international
investment and global competition. Under the WTO, a group
of unelected trade representatives will act like a global
parliament with the power to override economic and social
policy decisions of nation states and democratic
legislatures around the world. At the same time, the
world's major TNCs will have a powerful role to play in
the new WTO through direct linkages with the trade
representatives of participating countries. In the case
of the U.S., for example, members of the Advisory
Committee for Trade Policy and Negotiations include such
corporate giants as IBM, AT&T, Bethlehem Steel, Time
Warner, Corning, Bank America, American Express, Scott
Paper, Dow Chemical, Boeing, Eastman Kodak, Mobil Oil,
Amoco, Pfizer, Hewlett Packard, Weyerhauser, and General
Motors - all of whom are members of the Business Round
Table.

Systems
of Corporate Rule

The
following are some of the global systems that have been
effectively usurped by transnational corporations and
banks.

1.
Global Finance

The
globalisation of finance markets has been nothing
short of revolutionary. The days when national
authorities could stabilise financial markets through
banking regulations, reserve requirements, deposit
insurance, limits on interest rates, and the
separation of commercial and investment banking are
all but gone. In country after country, there has
been a massive deregulation of finance, as well as
mergers between commercial and investment banking.
Also, TNCs are now bypassing banks altogether to
issue their own commercial paper. Information
technology has transformed global banking to the
point where 2 trillion dollars is transferred
everyday around the world. Electronic transfer
systems make more than 150,000 international
transactions in a single day. The speed and frequency
of these money transactions - from Maylasia to
Toronto to New York to Miami to the Cayman Islands to
the Bahamas to Switzerland - makes it difficult to
trace, let alone regulate. Today, the global finance
market is dominated by Japanese banks (ie. eight out
of the world's top ten.) But this deregulated, global
finance market has become fragile and unstable to the
point where a financial shock in one country (eg.
Mexico) can dramatically upset financial markets in
other countries before national authorities have a
chance to intervene. Unless radically new regulatory
measures are introduced, the fiscal policies of
national governments will not only be dictated but
also threatened by a volatile, global finance system.

2.
Global Industrial Production

As
auto, electronics, textile and clothing industries
have outgrown their home countries, shifting their
production and supplier operations off shore to
independent contractors, the "global
factory" coupled with a radically new
international division of labour has emerged. With
the globalisation of production networks,
transnational manufacturing firms can quickly move
their operations around the world, chasing cheap
labour, taking advantage of more profitable
investment opportunities, and outflanking the demands
of unionised workers. In the auto industry, Ford and
GM have forged strategic alliances with Mazda and
Toyota to produce for each other's markets while in
the shoe industry, companies like Nike and Schwinn
have begun to shift from manufacturing to designing,
merchandising and distributing. This new global
factory, in turn, has resulted in a dramatic loss of
manufacturing jobs in the industrial North (ie. the
U.S., Japan, Europe) as manufacturing companies have
moved their production to low wage, tax free
countries in the South. Increasingly, workers around
the world find themselves lumped together in the same
labour pool to the point where exploitation in
Guatemala, Maylasia, or China is felt as wage
competition by workers in London, New York, or
Montreal. While the staggering wage gap between
workers in the North and the South has begun to
narrow, there is a very real danger that workers
everywhere will be dragged down to low common wage
standards by the forces of global competition.

3.
Global Product Distribution

Richard Barnet and John
Cavanagh, in Global Dreams, describe the
"global supermarket" that is transforming
agricultural production throughout the world but also
undercutting the capacity of nations to ensure that
the basic food needs of their populations are
sufficiently met. Transnational food corporations are
demanding an end to the system of agricultural
subsidies, regulation, and protection that has
maintained a relatively cheap food policy in the
industrial North. At the same time, poor countries in
the South who were once self-sufficient in food but
are now desperate for foreign exchange to pay down
their debts, are forced to turn over valuable
agricultural lands to the transnational agribusiness
and to convert to the production of cash crops while
importing food products to feed their own peoples.
"Export or Die" is the message. The
introduction of bio-tech production methods -
laboratory produced vanilla, bioengineered celery,
freeze-resistant flowers and tomatoes, bovine growth
hormones for cows, plus long distance food
transportation - pose further threats not only to the
livelihood of traditional farmers in poor countries
but also to the quality and safety of food products
in general. Meanwhile, the giant food corporations -
General Foods, Kraft, Pilsbury, Philip Morris, Del
Monte, President's Choice, Proctor & Gamble,
Pepsico etc. - have merged their operations and
expanded their marketing strategies on a global
basis. National authorities are also finding it
increasingly difficult to maintain adequate food
inspection at the border, especially for the massive
imports of fruits and vegetables that may have been
grown in areas where sewage is rampant, leading to
expanded use of such chemicals as methyl bromide, a
potent threat to the ozone layer.

The corporate dream of turning
the whole world into a kind of global shopping
paradise is also near at hand. Not only have Coca
Cola and Marlborough become universally recognised
brand names through massive corporate advertising,
but global retailers like Proctor & Gamble,
Philip Morris, RJR Nabisco, Kellogg, General Motors,
Sears, Unilever, Pepsico, Nestles, and MacDonalds
have been spending billions of advertising and
promotion dollars each year with the intent of
creating a steadily expanding global market based on
mass consumption. The strategy is to "sell the
same things in the same way everywhere" with
little or no regard for local customs, tastes,
cultural or religious differences. Giant retailers
like Wal-Mart have led the way with development of a
chain of superstores designed to sell the largest
range of retail consumer goods - food, clothing,
hardware, furniture, pharmaceuticals etc. - in towns
and cities throughout North America. Using a variety
of tactics ranging from low-wage part-time
employment, misleading advertising, predatory
pricing, competition law violations, and coercive
sourcing from suppliers, Wal-Mart has managed to
force local merchants out of business and in some
cases created ghost towns. Now the most aggressive
giant retailer in the world, Wal-Mart has plans to
expand its operations into parts of Latin America,
Europe, and Asia.

4.
Resource Control

Transnational
resource giants like Exxon, Mitsubishi, Texas Gulf,
Shell, Rio Tinto Zinc, Alcan and a host of energy,
mining, forestry and hydro corporations have expanded
their operations to the four corners of the earth,
posing serious threats to the environment by causing
massive oil spills, reversing water systems, flooding
huge land tracts, depleting vast forest areas,
eliminating fish stocks, and destroying vegetation
and wildlife. The only thing new about this is the
new atmosphere of deregulation in such areas as
environmental protection. The resource and energy
codes built into the free trade regimes (eg. NAFTA,
GATT) are designed to accelerate the rapid
development and export of natural resources.
Moreover, the export-or-die demands of the IMF mean
that poor countries with resource based economies
have no choice but to open their doors to
transnational resource companies without regulation
or environmental protection. Rapid exports not only
accelerate the depletion of non-renewable resources
but greatly intensify the global supplies of fresh
water that are now being targeted by TNCs. Add to
this last persistent destruction of rainforests plus
the continuous dumping of hazardous wastes into the
ecosystem by companies like Union Carbide, Dow
Chemical, and Dupont - there should be little wonder
the world is on the verge of an ecological holocaust.

5.
Banking, Insurance, Education

Transnational
corporations are also rapidly moving in to take over
control of basic services such as health care and
education which has been the public responsibility of
governments in most countries. Through a series of
vertical and horizontal mergers, a system of large
scale health care corporations is emerging. In the
U.S., the major drug companies like Eli Lily are
merging with the health insurance industries like PCS
for the takeover of hospitals, pharmacies,
freestanding clinics, nursing homes and doctors'
practices. The world's largest profit oriented
hospital companies, Columbia and Health Trust, have
merged to form a giant health care corporation with
sales exceeding that of Eastman Kodak or American
Express. In a deregulated global economy, these new
health care giants are poised to play a key role in
swallowing up pieces of the public health care system
in countries like Canada where there is enormous
pressure to privatise. At the same time,
transnationals are also invading the education
system. In the U.S. organisations like the Business
Higher Education Forum and the New American Schools
Development Corporation (which funnels corporate
finances into profit oriented elementary schools) are
composed of TNCs like AT&T, Ford, Eastman Kodak,
Pfizer, General Electric, Heinz, and many others.
Household brand names like Coca Cola, Pepsico,
MacDonalds, Burger King and Proctor & Gamble are
also directly involved in developing curriculum for
schools along with advertising promotions to help
kids "grow up corporate."

6.
Patenting of Life Forms

While
government regulations over the operations of TNCs
are being dismantled in countries all over the world,
the monopoly rights of the transnationals over
information and technology is now internationally
protected under the intellectual property rights
components of the GATT and the WTO. Moreover, this
international patent right protection has been
extended to genetic materials, including seeds and
natural medicinals. The patenting of life forms
allows transnational companies to secure widespread
control over genetically engineered organisms, from
microorganisms to plants and animals. Worse still,
transnationals are now able to obtain monopoly rights
over genetic research concerning an entire species
plus any products derived from that research. The
W.R. Grace corporation, for example, through its
subsidiary Agracetus Inc. has secured a U.S. patent
on all genetically engineered or
"transgenic" cotton varieties (1992), a
European patent on all transgenic soybeans (1994) and
has applications pending in other countries to take
control of 60 percent of the world's cotton crop,
including India, China and Brazil.

Under
these conditions, farmers who traditionally save seed
from one harvest to replant for their next crop would
find themselves in violation of international patent
law. Unless they pay a royalty to the TNC that owns
the patented seed, farmers around the world are now prohibited
from growing their own seed stocks. Furthermore,
there are moves to have these global monopoly rights
and patent protection laws extended to include the
cloning of human embryos.

7.
Cultural Cloning

Armed
with satellite communications, global entertainment
corporations are selling their pop music cultural
products all over the world. The target audience of
this global entertainment industry is the two-fifths
of the people on the planet who are under 20.
Bertlesman's pop music empire presently dominates
youth markets throughout Europe, North America, Latin
America and is now moving into Asia. Sony, Philips
and Matsushita have also been expanding into these
markets. Sony's prime focus has been on the
children's market promoting their toy-like radios
[ie. the My First Sony range], kids' music label, and
children's video library. The biggest technological
leap in the global entertainment during the 1980s
came with MTV. By 1993, MTV programs were reaching
210 million households in 71 countries throughout the
world. Increasingly, the big six global entertainer
corporations are focusing their energies on opening
up markets in Latin America and Asia where the
greatest growth potential exists. But this expansion
is also being challenged as a new form of cultural
imperialism. For the poor countries of Asia, Africa
and Latin America the big six penetration of
transnational sound will choke off traditional music
of the local culture as well as restrict employment
opportunities for local artists. At the same time,
the global entertainment industry will increasingly
generate a homogenised culture that reflects western
corporate values and priorities.

New
Bases for Social Action

The best
hope for countering growing corporate domination lies in
the building of social movements whereby people reclaim
their sovereign rights over transnational corporations
and banks.

Most
people now feel that they have lost control over their
economic, social, and ecological future. This is not only
true among the poor majority in the South, following the
damage done by massive structural adjustments, but
increasingly amongst the majority of working, middle
class peoples in the North. For many, the dream of
securing a full time job, a relatively stable, crime free
community, in a clean environment with a bright future
for their children, has been shattered. In this climate,
the politics of fear and the politics of insecurity have
become rampant in most of our countries expressing itself
sometimes as ethnic violence or, more recently, right
wing militias [in America]. As we move towards the 21st
century, not only do the postwar engines of economic
growth seem to be petering out in their reach for global
markets, thereby undermining effective demand and
confidence in the new global order and its institutions,
but a new set of class divisions and tensions is emerging
in our economies and societies, both North and South.
Underlying the politics of fear and insecurity is the
fundamental question of democracy itself. These
conditions, in turn, could create new political
opportunities and space for building social movements to
take democratic control over transnational corporations
that are dominating people's economic, social, and
ecological future.

Popular
Sovereignty

In the
building of social movements today, emphasis must be
placed on the notion of popular sovereignty as a common
base for action. Throughout this country alone, peoples
all over the world have fought for the recognition of
fundamental democratic and human rights - the right to
adequate food, clothing and shelter; the right to
employment, education and health care; the right to clean
environment, social equality, and public services; - and
the right to self determination and the ability to
effectively participate in decisions affecting these
rights. Together, these basic communal rights, which
constitute the core of popular sovereignty, have been
reflected and enshrined in the Universal Declaration of
Human Rights, the International Covenant on Economic,
Social, and Cultural Rights, and the International
Covenant on Civil and Political Rights. In the new age of
corporate tyrant, however, these fundamental human and
democratic rights of people have been largely stolen or
hijacked. Today, the rights and freedoms of transnational
corporations are not only enshrined but take precedence
over the democratic rights of peoples, nations, and
citizens. The time has come for citizens, through social
movements, to reclaim their sovereign rights over
transnational corporations.

New
Nationalism

The
emergence of the corporate state, wherein the reigns of
democratic governance have been taken over by
corporations and banks, has completely disfigured and
distorted the responsibilities of the national
governments. The moral and political obligations of
nation states to intervene in the market economy in order
to ensure that the entire national system - economic,
fiscal, social, cultural, environmental, political -
functions for the purpose of providing a profitable
climate for transnational investment and competition in
the new global economy. As the politics of insecurity
unfold, however, a right-wing brand of nationalism is
likely to arise with new forms of protectionism against
immigration, cheap imports, as well as further protection
for major TNCs. In other words, "protectionism for
the powerful." In this climate, it is imperative
that social movements focus their energies on the
"corporate state" and resisting the rise of a
new right-wing nationalism. People's energies need to be
mobilised around a new social version of the nation state
in an age of global interdependence, where governments
reclaim the power and tools necessary to exercise
democratic control over transnational corporations and
banks. In effect, the nation state must be retooled to
serve the rights of people (ie. popular sovereignty) to
secure control over their economic, social, and
ecological future. But this new nationalism must be
simultaneously carried out in concert with social
movements in other countries who are engaged in struggles
for democratic control over transnationals.

Citizens
Manifesto

In order
to build social movements in the North and South who are
committed to the task of taking democratic control over
TNCs in this new age of corporate tyranny, a common
platform and agenda needs to be developed. This could
take the form of a common manifest for citizens of the
world which would include:

a
declaration of the fundamental rights of people
to determine their own economic, social, and
ecological future;

the
sovereign rights of peoples over that of
transnational corporations and banks;

the
insistence that governments develop and enact new
regulatory measures for exercising democratic
control over TNCs; and

the
responsibility of social movements to take
whatever forms of action are needed to see that
people's basic rights are upheld and that
democratic control over the operations of TNCs is
maintained.

The core
of this citizen's manifesto would be the spirit and
practice of popular sovereignty. Its prime purpose would
be to provide social movements, both in the North and
South, with a common platform for action in dismantling
the corporate state and challenging the operations of
transnational enterprises at local, national, regional,
and international levels.

Social
movements need to develop the capacities and tools for
taking democratic control over TNCs. This calls for
strategic planning on the part of social movements. The
conventional strategies for addressing the behaviour of
TNCs, however, are not adequate for the task of either
dismantling the corporate state or effectively
challenging transnational regimes. What is needed is a
more systematic approach. To begin, it is important for
social movements to identify major TNC targets within the
main transnational regimes - finance, resources,
distribution, services, patents, media etc. - which are a
priority for democratic control for people in a given
country or region. Connections can then be made between
the particular TNC targets and the transnational regime
in which they operate plus the way in which the corporate
state functions in a given country or region. By drawing
these connections, social movements can set the stage for
developing strategic plans for exercising popular
sovereignty and taking democratic control.

Reproduced with the
permission of Edward Goldsmith, co-editor with Jerry
Mander, of The Case Against the Global Economy and
For a Turn Towards the Local - Sierra Club Books; fax
1-415-957-5793.